On the eve of a keynote I will deliver in Perth in mid April on the Future of the Accounting profession, here’s an article that was published in the April edition of Institute of Chartered Accountants “Charter” magazine:
The world of accounting will be revolutionised over the next 15 years with a fundamental move by most accountants away from the backline, with its focus on historic figures and tax compliance, to become a forward-looking well-informed wholistic business adviser on the frontline.
So says business futurist Morris Miselowski, who is speaking at an Institute of Chartered Accountants Conference in Perth on April 19.
Miselowski sees a futuristic world where employees work remotely and carry their offices with them in their mobile device which can be accessed anywhere in the world at any time.
“There will be an increasing reliance on accountants, with their detailed knowledge of their clients’ business, for information about how best to manage the business’s financial affairs. Accountants will have access to all of their clients’ relevant business details at their fingertips.
“Much of the mundane donkeywork needed for tax compliance will be outsourced and accountants will become specialist financial advisors who become an integral part of their clients’ thinking process.”
Miselowski says accountants will move from a reactionary role to a proactive role.
“In the past much of the work accountants have done is client-driven, reactionary and done after the fact. In 10-15 years they will be part of a process that works in tandem in real-time with business operators,” he says.
“By 2020 relationships between organizations, people and service providers will be far more intimate, accountants will be part of an individual’s advisory group and statutory requirements will be outsourced to some other country or person – that’s a fundamental shift.”
Accountants’ relationship with their clients will be significantly different.
Accountants who prosper in the world of the future will have moved beyond traditional taxation advice, playing a broader role in their clients’ businesses and offering more wholistic advice.
“In tomorrow’s business model clients will think ‘you are my financial advisor, you are part of my trusted tribe, you work in relationship with me and the others who advise me, you are constantly aware and on; I expect your advice when I ask for it but also at times when I don’t.’ Accountants will know that information because they will monitor their clients, with permission, in real time,” he says.
“This approach will apply to accountants working within a firm and those working externally within an accounting firm,” Miselowski says.
Much of the numberwork will be sent to workers in the future economic powerhouses of China and India. Bigger firms in the US already send up to 70 per cent of their tax compliance work offshore.
“Already book-keepers in India have good knowledge of tax laws in various countries around the world,” Miselowski says.
“The world will become a much smaller place and work will be routinely sent around the globe.”
While at pains to acknowledge that some accountants – particularly in big accounting firms or boutique accounting businesses – already have close relationships with their clients, Miselowski says by 2020 closer client relations would become the norm rather than the exception.
“The growth in the industry as we move into tomorrow will see accountants offer more than just numbers advice. They will offer business growth advice and bring in specialists to assist their client with other elements of their business,” he says.
“Large firms already act as a trusted advisor and offer specialists in various areas of business,” Miselowski says.
“We are already seeing the Big Four employing non-traditional employees – such as experts in online shopping and retailing and online digital advertising – because this is a space about which many of their clients are seeking advice.”
There will be a revolution of business across all levels, and its effects will be felt by accountants who work within a corporation or accounting firm, and in Australia and across the globe.
“Over the next 10 years we will see business change more significantly than we have in many hundreds of years. The financial/accounting world will evolve to meet new demands,” Miselowski says.
”There will be new jobs, a whole lot of new areas we create, and new industries.”
The pace of change in the past 20 years had been exponential, with it not being unusual these days for businesses to amass millions of customers within a year – a rate of unprecedented business.
“In the next 10 years we will move forward more than 100 years of technology and within 100 years we will move forward 1000 years of technology,” he says.
Miselowski says we are living a digital wild west, with few rules to guide us.
“We have moved into the virtual world and we now have an online world where every physical activity we do has an online equivalent,” he says.
Generation Y and Z, the next generation to take over business boardrooms, would have been raised in a virtual world. “They have grown up with computers and mobile devices and are incessantly on them. They see the world as simultaneously physical and virtual.”
Miselowski says technological advance has brought with it information (“we’re drowning in it from Google”); knowledge (“I can go to a blog and get someone else’s interpretation”) but to get wisdom an accountant would need to be consulted.
“What clients in the future will be wanting is the wisdom of someone with specialist knowledge at a time and place that is meaningful to them,” he says.
Advances in technology will allow accountants to mine and capture the number work.
“Accountants’ main role in the future will be in selling the interpretive wisdom. The wisdom sought will deliver different skills, different mindsets and offer different opportunities,” Miselowski says.
“Accountants will have to become good at interpreting information; work successfully with clients to inform them – sometimes in advance of their actions; and become adept at communication.”
He says the move to mobile access to information has already begun.
“We are moving away from a fixed computer and moving into a mobile world. Smart phones recognise where we are, who we are with, what we are doing and do all kinds of things at our behest. Bank accounts, share portfolios and other financial information will be connected in one space and will be able to give you advice, such as which credit card is best to use at this time.
“Within 10 years this will be absolutely normal. Accountants will be mining that information routinely and they’ll know all about their clients, their spending habits and what they have bought.”
Looking further into the future, Miselowski says by 2020 stemcells wil start to be used to grow organs and bones, travelling into space for tourism will be offered, an increasing number of today’s cancers would have been tamed, we will have an understanding of how the brain works and children born then will live for at least 120 years.
The accounting industry will also be involved in a revolution in the way people work, and predicts a third of the workers in the western world will work virtually and remotely by 2025.
Accountants will no longer be physically housed in a building, and won’t work 9-5 days.
“The notion of squeezing work in between the hours of 9am and 5pm is a nonsense. The business world will adopt a project and task model, whether accountants work internally or externally,” he says.
While the need for traditional numbercrunching accounting work will remain, today’s accounting practice business model will be turned on its head by 2025, he predicts.
“In the accounting world of the future numbercrunchers will be a small enclave rather than the totality. The current business model – which sees most accounting practices with a majority of numbercrunchers and the minority (partners) outreaching and outsourcing business – simply doesn’t make sense financially.”
His advice to today’s accountants in accounting firms is to find a specialist niche that can be sold or provided through an accounting or financial firm which is a growth area for the world in which they work.
He advises internal advisors to take on a generalist advisor role because that will also be needed. While there was limited room for businesses to continue to exist in their current narrow model, there was still a need for them, he says.
Future accounting practices will have extremely communicative consultants with a far closer and more intimate relationship with their clients and accountancy would become a much more advice-based people profession.
“Where once accountants saw their clients once or twice a year and interacted more with texts, books and notes, in the future they will be consulted much more often and interact much more with people,” Miselowski says.
“Accounting will become a complete customer interaction industry because there will no longer be any need for clients to use them ‘to get their books done’.”
He says accountants will continue their education by constant up-skilling because they will be custodian of their own career and predicts global accounting qualifications will begin around 2030.
He says the working world had changed vastly even in his lifetime.
“Generations X and Y have learnt, through watching their parents, that employment is short-term and loyalty is no longer required. There are a growing number of employees defined by the notion of six careers and 14 jobs in one lifetime.”
Miselowski notes the huge opportunities open to Australians keen to capitalise on the growth of the economic powerhouses of China and India.
“By 2025 China will be a dominant spending power on the planet and will have a large middle class. India’s growth in consumer demand will be about a decade or so later.
“Australia, in the Asia corridor, is placed perfectly to have a great influence on those economies. Geographically, it is close to most Asian countries and has better time zones than the US and UK.
“Australia also knows, from a financial/accounting perspective, how businesses will evolve. These countries are inviting Australia to share the business wisdom they have and that they are yet to gain.
“There are huge possibilities for Australians in those spaces”.